Movie studios prep Fraud II for the holidays

Silicon Justice The Motion Picture Association of America have been some busy pigopolists as of late.

A recent report from Wired News revealed that MPAA lobbyists helped kill a bill working its way through the California legislature in August designed to prevent companies and individuals from obtaining customer or employee information through pretexting - the euphemistic term for fraud popularized by HP.

The bill, S.B. 1666, would have imposed civil penalties on anyone who used fraudulent methods to obtain, or even attempted to obtain, personal information contained in business records. This didn't fit with the MPAA's desire to plumb people's privacy in order to conduct piracy investigations.

Alarmed at the bill's rapid march through the California Senate, where it was approved by a 30-0 vote, the MPAA mounted an impressive last-minute campaign to block its passage in the Assembly, according to people interviewed by Wired.

The MPAA spread word among legislators that it needed to retain the ability to get personal information through pretexting in order to combat piracy. It has been suggested that the MPAA and its cronies disguise their true identities in order to suss out online copyright violators and brick and mortar types offloading DVDs or CDs from flea market carts.

It's quite amazing that the California legislators bought into the argument that a private organization really, really needed to have the ability to trick and deceive organizations in order to uphold its copyrights, but we'll leave that issue for the political commentators.

The MPAA's message went out just days before the HP pretexting scandal broke, and hints that the movie industry has engaged in the same practices (or worse) that got HP into such hot water. Bill Lockyer, the California Attorney General, has filed criminal charges against five figures in the HP scandal under theories of data and identity theft. It's unclear whether the counts will stick, but if they do, some MPAA executives might start thinking about retaining defense attorneys in the near future.

The MPAA has a lot of weight to throw around in California, where film production is a major industry. When the pretexting bill ultimately went up for a vote in the Assembly, it failed 33-27. The timing couldn't have been better for the MPAA, since the HP imbroglio could have altered the outcome if the vote had occurred a few days later. But it didn't, so now the association remains free to weasel their way into consumers' private information.

The California legislature did eventually pass S.B. 202, which created criminal liability for the acquisition of telephone records through pretexting.

Pretexting for all other kinds of information remains in something of a legal grey area, though. So, the MPAA can't find out who you've called to brag about your recent movie download or DVD rip, but it can probably still get your IP address, mother's maiden name and astrological sign - or whatever else might help them bust you for piracy.

The revelation concerning the MPAA's close involvement with the democratic process in California would have been a big enough story, but it takes on added significance when considered in the context of some recent moves and occurrences that have shown just how serious the association is about locking up its content behind the Digital Millennium Copyright Act and going after those who don't use it the way the association tells them to.

First, the MPAA's view that there are no personal fair use rights with purchased DVDs was apparent in Wal-Mart's announcement last week that it would begin offering consumers who purchase a DVD of "Superman Returns" the option to download a copy of the movie to a portable player for $1.97 or a PC for $3.97. Not every studio has signed onto the idea, but it appears that the hesitation is over the price points, and not the principle lurking behind the triple offering.

That principle is that consumers have no space-shifting right when they buy a physical copy of a movie on DVD since the content is protected by a Content Scrambling System. Under this idea, consumers cannot transfer content from a legally purchased DVD onto a mobile device or PC hard drive, and must instead buy separate versions for each space in which they would like to store the content.

The MPAA is attempting to uphold this principle in a suit filed early last month in the District Court for the Southern District of New York. The complaint [PDF] argues that the defendant, a company which sells both DVDs and portable media devices, violated the DMCA's prohibition on circumventing content-protection systems when it sold its customers DVDs and devices and then ripped the content of the DVD onto the device as a complimentary service.

The MPAA's argument, unfortunately for consumers, is almost certainly legally correct. The DMCA's circumvention prohibition probably does block space-shifting for DVDs, especially when viewed against the Register of Copyright's specific refusal [PDF] to recommend an exemption for space-shifting activities. The federal government argued that space-shifting, even if it is non-infringing (which the Copyright Register seemed to doubt), is a convenience more than a right, and one that deserves no exemption from the DMCA prohibition.

So now the MPAA has its content locked up tight and is trying to sell you three different versions of the same mediocre summer blockbuster, while tricking companies into giving out your personal information so the association can track you down and drag you to court when you rip the flick onto your iPod instead of shelling out more money for content that you've already bought. Neat, huh?

By the way, that cold feeling sliding down your spine is a simple mix of fear and loathing. Try not to fight it - it's a natural reflex. ®

Kevin Fayle is an attorney, web editor and writer in San Francisco. He keeps a close eye on IP and International Law issues.